Showing great wisdom, our mothers cautioned us to never judge a book by its cover. Yet, when we purchase wine, we often look for the fancy label design, interesting back label story, or colorful capsule covering the cork. That said, most wine drinkers use price as the most important indicator of wine quality. Surely a $100 wine must be better than a $15 bottle, otherwise why would the retailer charge more for it?
In the absence of understandable, easily accessible quality metrics, we utilize price as a surrogate for quality. Sure, we may search reviews looking to see if the pretty label represents a 90+ point wine, but in the heat of the moment in a restaurant we read the wine list right to left choosing a wine by its price rather than its pedigree. Frankly, most consumers employ this this approach when they purchase products where quality and value are difficult to judge or trusted quality information is unavailable.
As we move to value-based reimbursement models where price matters, linking quality to price becomes more important than ever. The passage of the Affordable Care Act (ACA) dramatically changed the healthcare marketplace and the economics driving it.
Excerpts from: Bacchus and Healthcare. PSQH, May/June 2014